Foreign and Colonial Policy. In 1898 Spain lost the SPANISH-AMERICAN WAR, and with it almost her entire colonial empire. Cuba,
the main battleground, gained her independence;
PUERTO RICO,
GUAM and the
PHILIPPINES were ceded to the USA (TREATY OF PARIS,
1898), the Spanish claim over the MARIANA (except Guam) and
CAROLINA ISLANDS sold to Germany. Spain only held on to her African
colonies. Spain no longer was a major political power. The country did not feature in the various alliance systems that preceded World War I,
while countries such as Italy, Bulgaria and Rumania were wooed by Europe's military powers as potential partners.
Spain, having century-old outposts in Morocco, played a role in the Moroccan crises; the country hosted the ALGECIRAS CONFERENCE
and gained three stretches of Moroccan territory - the RIF, IFNI and CAPE JUBY, as well as the (northern part of the) SPANISH SAHARA.
Especially the claim over the Rif required an effort toward pacification.

Domestic Policy. In the 1890es Spain found itself in a political crisis. The CANOVITE SYSTEM with government-controlled
elections (CACIQUISMO), insuring the regular alternation of liberal and conservative cabinets ("dynastic politicians"), showed signs of breaking up.
The political movements denied fair competition - Anarcho-Syndicalists, Socialists, regional movements (Basques, Catalans) voiced their demand
for participation in the political process on equal terms or for another change of the constitution. The PSOE (Socialist Party) had been founded in
1879. The Basque Nationalist Party was founded in 1894, the Catalan Lliga Regionalista in 1901; the Republicans formed an electoral alliance in 1903
which turned into the Reformist Party in 1912.
King ALFONSO XIII. (ruled 1902-1931) was not satisfied with the function of a figurehead and used the powers granted to the king by the
constitution of 1876, by repeatedly forcing a government to resign etc. Spain saw a succession of short-lived cabinets. In 1906 an
attempt to assassinate the king failed.
In 1905 a Catalan magazine published a cartoon criticizing the Spanish army. A mob consisting of Spanish officers vandalized the magazine
office; while the outraged Catalan public demanded the responsible to be punished, the king dismissed the pm and his successor gave in to
pressure from the army, passing a law that foresaw offenses against the army as falling under military jurisdiction; thus the military was placed
beyond control of civil authorities. Mass protests in Barcelona escalated into riots ("tragic week") and were suppressed by force. The enlistment
of soldiers in 1909 (for the purpose of pacifying the Rif) caused unrest; Barcelona again erupted in revolt. In 1912/14, Catalonia saw a major reform,
the establishment of the MANCOMUNITAT, a major step on the road to Catalonian autonomy.
While republicans, anarchists, socialists and the regional organizations, the Basque and Catalonian parties, were virtually excluded from the
political process, the liberal and conservative governments were at least in part instruments of royal policy. The most prolific polititian of the
era was ANTONIO MAURA (cons.), prime minister 1907-1909; he repeatedly refused a royal offer to form a cabinet, thus expressing his protest
against royal interference in party politics. The assassination of prime minister CANALEJAS in 1912 again showed the resentment of the caciquismo
by a significant segment of the population.

Intellectual Life. In 1901 JOAQUIN COSTA published "Oligarchy and Caciquism as the present form of Government in Spain"; in his
analysis of the situation he came to the conclusion that it would take a caudillo (leader) to overcome it and implement necessary reform.
Other intellectuals who saw the defeat in the Spanish-American War as an indicator for the necessity of thorough reforms included writer
MIGUEL DE UNAMUNO, JOSE ORTEGA Y GASSET, ANTONIO MACHADO.